Chief Financial Officer and Treasurer Chris McKown said adjusted total investment income declined to $74.5 million from $76.9 million in the fourth quarter, primarily due to lower interest income from lower reference rates and lower original issue discount acceleration. He added that higher fee income, “largely from higher prepayment and exit fees,” partially offset the decline. McKown also noted net expenses decreased modestly, driven in part by a $4 million reduction in Part I incentive fees, “primarily a ...

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh. ...

Financial Data and Key Metrics Changes - Adjusted Net Investment Income for Q1 2026 was $36.1 million, or $0.41 per share, up from $35.4 million or $0.40 per share in the prior quarter [4][19] - NAV per share decreased to $16.30 from $16.64 in the previous quarter due to unrealized depreciation on certain investments [19] - Adjusted total investment income decreased to $74.5 million from $76.9 million in the prior quarter, primarily due to lower interest income [19][20] Business Line Data and Key Metrics Changes - New funded investments totaled $314 million, up from $220 million in the prior quarter, reflecting a 42% sequential increase [6][16] - Non-accruals represented 3.1% of the total debt portfolio, stable sequentially and down nearly 85 basis points year-over-year [7][18] - The weighted average yield on debt investments was 9.3%, with first lien senior secured debt comprising 85% of the total portfolio [15][21] Market Data and Key Metrics Changes - Current trends in private credit show a bifurcation in the economy, with companies of scale having ample access to capital while struggling companies face limited access [9] - Spreads in private credit have bottomed out at SOFR +450-475 basis points, with expectations for stability in 2026 [10] - The median portfolio EBITDA increased from $150 million to $190 million sequentially, driven by new originations in larger companies [30] Company Strategy and Development Direction - The company remains focused on disciplined capital deployment into income-generating assets and reducing non-accruals to improve earnings power [5][6] - Oaktree is prioritizing loans to businesses with resilient models and defensible market positions, particularly in the software sector [10][12] - The company is monitoring the impact of AI on private credit and is cautious about potential disruptions in the software industry [11][38] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding middle-market M&A activity improving over the year, despite current lower volumes [9] - The company is focused on maintaining strong alignment with shareholders while navigating an evolving credit landscape [8] - Concerns were raised about the long-term refinanceability of loans in the software sector due to potential AI disruptions [38][39] Other Important Information - The company ended the quarter with over $576 million in available liquidity, including $81 million in cash [21][22] - The joint ventures held $511 million of investments, generating ROEs of 12% in aggregate [22] Q&A Session Summary Question: Can you provide insight into the portion of the portfolio that is underperforming? - Management indicated that underperforming assets include non-accruals and positions trading below par, with most below-par loans being public positions [24][25] Question: What drove the increase in median portfolio EBITDA? - The increase was primarily driven by new originations funded in the fourth quarter, which were larger companies, contributing to a mix shift [30] Question: Can you discuss the unrealized appreciation and markdowns in the quarter? - Pluralsight was the largest driver of markdowns, accounting for about 38% of the total mark, with some smaller marks in other private positions [32] Question: How is the company characterizing top-line growth and EBITDA trends in the software sector? - Management noted that it is too early to see performance degradation in software names, but concerns exist regarding long-term refinanceability due to AI risks [36][38]

Financial Data and Key Metrics Changes - Adjusted Net Investment Income for Q1 2026 was $36.1 million, or $0.41 per share, up from $35.4 million or $0.40 per share in the prior quarter [4][21] - NAV per share decreased to $16.30 from $16.64 in the previous quarter due to unrealized depreciation on certain investments [21] - Adjusted total investment income decreased to $74.5 million from $76.9 million, primarily due to lower interest income [22][23] Business Line Data and Key Metrics Changes - New funded investments totaled $314 million, up from $220 million in the prior quarter, reflecting a 42% sequential increase [6][17] - Non-accruals represented 3.1% of the total debt portfolio, stable sequentially and down nearly 85 basis points year-over-year [7][20] - The average all-in spread and yield of new private investments was 525 basis points and 9%, respectively [6] Market Data and Key Metrics Changes - Current trends in private credit show a bifurcation in the economy, with companies of scale having ample access to capital while struggling companies face limited access [9] - After the Fed rate cut in September, spreads in private credit have stabilized at SOFR plus 450-475 basis points [10] - The median portfolio EBITDA increased from $150 million to $190 million sequentially, driven by new originations in larger companies [34] Company Strategy and Development Direction - The company is focused on deploying capital into income-generating assets and reducing non-accruals to improve earnings power [5][6] - There is a commitment to disciplined underwriting and selectivity in investment opportunities, particularly in resilient market-leading businesses [11][12] - The company is monitoring the impact of AI on private credit and the broader economy, emphasizing the importance of execution and speed of adoption [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the stability of spreads in 2026 and the potential for increased middle-market M&A activity [10][12] - Concerns were raised about the long-term impact of AI on software companies, particularly regarding their refinanceability [40][42] - The company remains constructive on the long-term outlook for private credit, emphasizing the importance of active portfolio management [13] Other Important Information - The company declared a quarterly cash dividend of $0.40 per share, payable on March 31, 2026 [5] - The weighted average interest rate on debt outstanding was 6.1%, down from 6.5% in the prior quarter [24] - The company has approximately $576 million in liquidity, including $81 million in cash and $495 million in undrawn capacity on its credit facility [24] Q&A Session Summary Question: Can you provide insight into the portion of the portfolio that is underperforming? - Management indicated that underperforming assets include non-accruals and positions trading below par, with most below-par loans being public positions [27][28] Question: What drove the increase in median portfolio EBITDA? - The increase was primarily driven by new originations funded in the fourth quarter, which were larger companies, contributing to a mix shift [34][35] Question: Can you discuss the unrealized appreciation and markdowns in the quarter? - The largest driver of unrealized depreciation was Pluralsight, accounting for about 38% of the total mark, with some smaller marks in other private positions [36][37] Question: How does the company view top-line growth and EBITDA trends in the software sector? - Management believes it is too early to see performance degradation in software names, but concerns exist regarding long-term refinanceability due to potential AI disruption [40][42]

Financial Data and Key Metrics Changes - Adjusted Net Investment Income for Q1 2026 was $36.1 million, or $0.41 per share, a modest increase from $35.4 million or $0.40 per share in the prior quarter [3][20] - NAV per share decreased to $16.30 from $16.64 in the previous quarter due to unrealized depreciation on certain investments [20] - Adjusted total investment income decreased to $74.5 million from $76.9 million, primarily due to lower interest income [20][21] - Net leverage ratio increased to 1.07 times from 0.97 times, reflecting strong deployments during the quarter [22] Business Line Data and Key Metrics Changes - New funded investments totaled $314 million, up from $220 million in the prior quarter, indicating a 42% sequential increase [5][16] - Non-accruals represented 3.1% of the total debt portfolio, stable sequentially and down nearly 85 basis points year-over-year [5][19] - The weighted average yield on debt investments was 9.3%, with first lien senior secured debt comprising 85% of the total portfolio [15][22] Market Data and Key Metrics Changes - The private credit market is experiencing a bifurcation, with companies of scale and profitability having ample access to capital, while struggling companies face limited access [8] - Spreads in private credit have bottomed out at SOFR plus 450-475 basis points, with expectations for stability in 2026 [9][10] - Median portfolio EBITDA increased from $150 million to $190 million sequentially, driven by new originations of larger companies [33] Company Strategy and Development Direction - The company is focused on disciplined capital deployment into income-generating assets and reducing non-accruals to improve earnings power [4][5] - There is a commitment to strong alignment with shareholders while navigating an evolving credit landscape [6] - The company is prioritizing loans to businesses with resilient models and defensible market positions, particularly in the software sector [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the middle-market M&A activity improving over the year, despite current lower volumes [8] - The impact of AI on private credit is being closely monitored, with expectations of uneven outcomes across different players [10][11] - The company remains constructive on the long-term outlook for private credit, emphasizing disciplined underwriting and active portfolio management [12] Other Important Information - The company declared a quarterly cash dividend of $0.40 per share, payable on March 31, 2026 [4] - The company ended the quarter with over $576 million in available liquidity, including $81 million in cash [23] Q&A Session Summary Question: Can you provide insight into the portion of the portfolio that is underperforming? - Management indicated that underperforming assets include non-accruals and positions trading below par, with most stress observed in public positions [26][27] Question: What drove the increase in median portfolio EBITDA? - The increase was primarily driven by new originations funded in the fourth quarter, which were larger companies, contributing to a mix shift [33] Question: Can you elaborate on the unrealized appreciation and markdowns in the quarter? - The largest driver of unrealized depreciation was Pluralsight, accounting for about 38% of the total mark, with some smaller marks in other private positions [35] Question: How does the company view top-line growth and EBITDA trends in the software sector? - Management noted that it is too early to see performance degradation in software names, but concerns exist regarding long-term refinanceability due to potential AI disruption [39][40]

Earnings Presentation NASDAQ: OCSL First Quarter 2026 Forward Looking Statements & Legal Disclosures Some of the statements in this presentation constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this presentation may include statements as to: our future operating results and distribution projections; the ability of Oaktree Fund Advisors, LLC (together with its affiliates, "Oaktree") to impl ...

Oaktree Specialty Lending (OCSL) came out with quarterly earnings of $0.41 per share, beating the Zacks Consensus Estimate of $0.38 per share. This compares to earnings of $0.54 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +8.84%. A quarter ago, it was expected that this specialty finance company would post earnings of $0.38 per share when it actually produced earnings of $0.4, delivering a surprise of +5.26%.Over the last ...

Oaktree Specialty Lending Corporation Announces First Fiscal Quarter 2026 Financial Results Exhibit 99.1 LOS ANGELES, CA, February 4, 2026 - Oaktree Specialty Lending Corporation (NASDAQ: OCSL) ("Oaktree Specialty Lending" or the "Company"), a specialty finance company, today announced its financial results for the first quarter ended December 31, 2025. Financial Highlights for the Quarter Ended December 31, 2025 "We delivered solid results in the first fiscal quarter of 2026 including adjusted net investme ...

LOS ANGELES--(BUSINESS WIRE)--Oaktree Specialty Lending Corporation (NASDAQ: OCSL) ("Oaktree Specialty Lending†or the "Company†), a specialty finance company, today announced its financial results for the first quarter ended December 31, 2025. Financial Highlights for the Quarter Ended December 31, 2025 Total investment income was $75.1 million ($0.85 per share) for the first fiscal quarter of 2026 as compared to $77.3 million ($0.88 per share) for the fourth fiscal quarter of 2025. Adjusted t. ...

Investment Portfolio - As of December 31, 2025, the company held $2,949.1 million in investments at fair value, an increase from $2,847.8 million as of September 30, 2025, primarily due to purchases of investments during the quarter [331]. - Approximately 95.2% of the company's total assets represented investments at fair value as of December 31, 2025, compared to 94.8% as of September 30, 2025 [332]. - The fair value of investments is determined quarterly, with 99.8% of the portfolio valued based on market quotations or corroborated by independent valuation firms as of December 31, 2025 [329]. - The investment portfolio composition at cost as of December 31, 2025, included 83.26% in senior secured debt and 4.34% in common equity and warrants [339]. - The fair value of senior secured debt increased to 86.38% of total investments as of December 31, 2025, compared to 85.88% as of September 30, 2025 [339]. - The industry composition of the portfolio at cost included 17.10% in application software and 5.60% in health care services as of December 31, 2025 [340]. - The company’s investments primarily consist of loans, common and preferred equity, and warrants in privately-held companies [337]. Investment Strategy - The company focuses on situational lending, select sponsor lending, stressed sector and rescue lending, and public credit to achieve attractive risk-adjusted returns in the current market environment [315]. - The company aims to generate current income and capital appreciation through flexible financing solutions, including first lien loans, second lien loans, unsecured and mezzanine loans, and equity co-investments [314]. - The company continues to seek opportunities in the middle market, leveraging Oaktree's decades of credit investing experience to source and structure investments [319]. - The company’s investment strategy includes assessing portfolio companies based on financial statements, projections, and market conditions [336]. Financial Performance - Total investment income for the three months ended December 31, 2025, was $75.1 million, a decrease of $11.6 million or 13.3% compared to the same period in 2024 [357]. - Net expenses for the three months ended December 31, 2025, were $38.4 million, a decrease of $3.7 million or 8.8% compared to the same period in 2024 [358]. - The company recorded net realized gains of $1.3 million for the three months ended December 31, 2025, compared to net losses of $(17.3) million in the same period in 2024 [361]. - Net unrealized depreciation for the three months ended December 31, 2025, was $32.4 million, compared to $19.6 million in the same period in 2024 [363]. Cash and Debt Management - As of December 31, 2025, the company had $1,615.0 million in senior securities and an asset coverage ratio of 188.62% [366]. - For the three months ended December 31, 2025, net cash used by operating activities was $83.5 million, with net cash provided by financing activities of $84.8 million [367]. - As of December 31, 2025, the company had $80.8 million in cash and cash equivalents and portfolio investments valued at $2.9 billion [369]. - The company reported $665.0 million of borrowings outstanding under the Syndicated Facility as of December 31, 2025, with a fair value of $665.0 million [389]. - The company has $274.5 million of unfunded commitments as of December 31, 2025, which includes $247.3 million for debt and equity financing to portfolio companies [371]. - The company’s total debt was $1.615 billion as of December 31, 2025, with a weighted average interest rate of 5.945% for the three months ended December 31, 2025 [389]. - The company maintained a minimum shareholders' equity of $1.466 billion, exceeding the required target of $871 million as of September 30, 2025 [388]. Interest Rate Exposure - As of December 31, 2025, 91.3% of the company's debt investment portfolio bore interest at floating rates, indicating a significant exposure to interest rate fluctuations [414]. - The company regularly measures exposure to interest rate risk and assesses the need for hedging transactions [416]. - Interest rate sensitive assets and liabilities are compared to manage interest rate exposure effectively [416]. - The company has multiple interest reset periods for each loan, allowing flexibility in managing interest rates [416]. Shareholder Distributions - The company declared a quarterly distribution of $0.40 per share, payable in cash on March 31, 2026, to stockholders of record on March 16, 2026 [410]. - The company paid a quarterly distribution of $0.40 per share on January 27, 2025, totaling $31.5 million in cash [381]. - The company did not issue any shares of common stock during the three months ended December 31, 2025, as part of its dividend reinvestment plan [376]. Risk Management - The company monitors macroeconomic conditions, including inflation and geopolitical conflicts, which may impact market supply and demand dynamics [317]. - The company’s risk management procedures are designed to monitor financial market risks, including changes in interest rates that may affect both funding costs and interest income [413]. - The company anticipates timely distribution of its taxable income in accordance with tax rules, having not incurred a U.S. federal excise tax for calendar years 2024 or 2025 [403]. - The company must distribute at least 90% of its annual taxable income to maintain its RIC status, which may limit its ability to make distributions due to covenants in its credit facilities [404]. - The company’s investments are valued at fair value as determined by Oaktree, which may involve significant management judgment and could differ materially from realized values [412].